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As Vice Chairman of Lotus Greens, Sahel is responsible for giving directions on overall business strategy and key investments decisions of the firm. Being one of the founding members of Lotus Greens, Sahel has been instrumental in formulating various company policies, setting up systems and processes, and building a strong team of professionals. Prior to Lotus Greens, Sahel worked for more than 16 years in some of India’s largest and most respected real estate companies like Jones Lang LaSalle for 13 years as the Managing Director of the Markets & Solution Development and DLF prior to that. The views expressed are personal

Redevelopment is an intrinsic part of the process of urbanization. It helps in effective land use, rejuvenates decaying housing stock and infrastructure and brings in fresh investments and new development. In densely packed areas of cities, redevelopment offers an alternative way to rebuild the inner core areas by knocking down buildings in decline and replacing them with fresh stock and improved physical environment.

Redevelopment holds key benefits for many of our bigger cities. Cities such as Delhi and Mumbai face constraints on the availability of open land within the city limits. And they have virtually no developable land available in the core inner areas, which remain densely populated even as they face an acute shortage of housing. With developable land hard to come by, redeveloping existing real estate properties seems to be the logical solution to accommodate the rapidly expanding population of urban dwellers besides also offering another line of business for developers.

The city of Shanghai is an outstanding example of how a city re-oriented its focus and prospered through redevelopment. With around 2 million dilapidated households in urban India, planned redevelopment with rationalized floor space index could ease the housing woes in many of our bigger cities. These include Mumbai (59,094 dilapidated houses including suburbs and Thane), Kolkata (25,777) and Patna (21,077), which presents a sizable market.

Among Indian cities, the practice of redevelopment is most popular in Mumbai where finding developable land is a huge challenge and which faces a humongous demand for quality, affordable housing. It is estimated that 60% of Mumbai’s 18 million people live in slums and shantytowns.

After the owner agrees to put his property for redevelopment, the developer pays an amount of consideration to the owner for permitting the re-development of the building or the open plot. The developer also constructs a bigger building by using the Transferable Development Right (TDR) and the Floor Space Index (FSI) once the building is demolished.

Like in Mumbai, many housing societies and independent property owners in other cities have started to come forward to reinvent their property by choosing redevelopment. The redevelopment trend is catching on in cities like Pune, Chennai, Kolkata, Ahmedabad and other cities. The growing collaboration among developers and property owners over redevelopment projects is helping breathe fresh life into many aging and vulnerable properties. As a result, many buildings that had reached the end of their useful life have been rebuilt from the ground up with contemporary features and modern facilities.

The transformation brought about by successful redevelopment of properties has reinforced the belief that repositioning of existing dilapidated areas can help create new space and modern infrastructure. This is creating positive user response towards redevelopment. Even government agencies and development authorities are now expanding the use of redevelopment process for facilitating efficient land use and for redesigning urban spaces to offer better connectivity, mobility and livability.

Redevelopment also offers an opportunity for people to return to the vicinities they have spent a lifetime in, but with new and improved residential conditions enhancing their lifestyle. If used correctly, redevelopment can act as a potent economic engine. “By ensuring an apt balance of modernization and cultural assets while creating sustainable structures that can stand the test of time, redevelopment can also help boost property value, create jobs while eliminating urban decay and improving infrastructure,” says an IPC report.

Given the huge potential for redevelopment in many Indian cities, making redevelopment policy more attractive and rewarding for both developers and property owners is imperative. Getting regulatory approvals and clearances for a redevelopment project is a more complex process than it is for a greenfield project. Funding is also a major issue. The Government does not allow foreign investment in redevelopment. So developers have to depend on domestic routes, which are costly.

At a time when re-development seems to be the way forward for cities that are facing a lack of land resources, it might be safe to say that there is scope for re-development to pick up in other Indian cities too.

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